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Low-quality stocks on the S&P 500 Index
/quotes/zigman/3870025/realtimeSPX have been outperforming higher-quality ones over the last 12 months. But as the market enters a period of seasonal instability, whether it be the sell in April/May crowd or those concerned about the lead up to the midterm elections, Sam Stovall, chief equity strategist at S&P Capital IQ believes certain high-quality stocks are likely to benefit from a rotation back into quality.

The S&P 500 Index
/quotes/zigman/3870025/realtimeSPX peaked and fell both in 2000 and 2007, so are we in for what S&P Capital IQ’s Sam Stovall calls a “Seven Year Glitch” in 2014?

Several bad market omens have been circulating lately as investors try to come to terms with a more than five-year old bull market that stubbornly is 2% to 4% off its recent highs for 2014. There’s the rarity of bull markets that make it to a sixth birthday, the summer slump in markets preceding midterm elections, scary charts professing similarities to past crashes, and now, a warning that stocks tend not to do well for the year if they’re down on the year by Easter.

The bounce back in momentum stocks may be short-lived, even as the S&P 500 continues to recover from last week’s selloff, according to a recent note from Goldman Sachs.

The firm looked at 46 instances where momentum stocks ran out of gas to weigh on the broader market and found that, on average, the S&P 500 recovered, while momentum stocks maintained their negative trajectory.

Much like this time last year, defensive stocks are outperforming cyclical stocks, and that’s not very promising for a market breakout to the upside, especially since the broader 10% market rise in 2013′s first quarter is nowhere to be seen.

Can we hope for a rebound in cyclical stocks soon to drag the broader market out of its malaise? Jeffrey Kleintop, chief market strategist at LPL Financial, thinks so, as long as we find that the disappointing economic data of late has been tied to the lousy weather.

Is a June Swoon in the works for stocks because it’s a mid-term election year?

Without any sort of positive catalyst to give stocks a boost, the market could very well fall into the seasonal slump that characterizes mid-term election years, said Sam Stovall, chief equity analyst at S&P Capital IQ, in a Monday note.

The correlation between megacap stocks is at its lowest levels in years, meaning they’re less likely to move in lockstep and more likely to show differentiation. So what are the best and worst stocks megacap stocks going forward?

In this league, banks appear to have an edge over consumer-based stocks, according to Morgan Stanley.

How much is a quarterly earnings beat worth? Not a lot on its own. And if you’re a large cap company without a corresponding beat on revenue, it can ding your stock price, according to a Thomson Reuters survey released Thursday.

Profit growth is declining, and given that stocks are trading near record levels, any currency shock out of Asia makes the market particularly vulnerable and could send the U.S. into recession as job growth and investment vanish. That’s the take from Societe Generale uber-bearish strategist Albert Edwards.

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